London’s Housing Crisis, a public meeting

Dave Smith from London Citizens told us about East London Community Land Trust and its plans for the St Clement Hospital site in Mile End, which hope to provide permanent affordably housing for the community. He said the chief threat to the project lay in the government’s refusal to recognise the public good it would deliver – the trust would have to compete against private developers on the open market to buy it.

He explained that with all of the talk now about “affordable housing”, London Citizens was conducting comunity research to consider: “what does affordable mean in terms of housing?” Olympics construction was supposed to provide 35% affordable housing, but this was defined in part in terms of local market prices, while his group was trying to synthesise a new definition, working from what people can afford to pay. (Based on the same principles as the London Living Wage.)

Robert Taylor from the Camden Federation of Private Tenants set out the changing balance of housing. Now 70% of households own, while 30% rent, but after the Second World War 90% rented. London has the highest proportion of private rented accommodation – 690.000 households, or 20.2%. The England average is 12.2%. Those are 2009 figures; they would now be higher.

There was a lot of talk of a new category of private tenants,’generation rent’ – who can’t afford to buy. “This is being seen as negative thing, but it should be seen as positive. There needs to be a culture shift that final end of “housing journey” can be renting.”

One problem in the sector, he said, was that it was functioning as a “cottage industry” – in 2006 73% of properties were owned by individuals and couples, who typically owned 1-4 properties. Standards could be lot more professional.

Unlike the situation in the past, when tenants had mostly dealt directly with owners, now 60-70% of lets were via agents, who frequently charged large admin fees to tenants. Again regulation was needed.

But the biggest issues now were short-term insecurity, with tenants always at risk of being tossed out of their home on two months’ notice, and rent inflation, which was now 8-10%, reflecting an imbalance between supply and demand. Four tenants are seeking every property. “Choice doesnt exist in private rental sector.” Robert suggested that tenants should acquire more rights as the tenancy continued – this could benefit both sides of the transaction as landlords frequently complained they wanted more stability in tenancies.

Rachel Orr from Shelter said that the government had replaced social rented housing with “affordable model”, with rents set at 80% market rate. “The government won’t subsidise assets but individuals through housing benefit.” Local authorities were placing homeless people into private sector housing, but it was itself a huge cause of homelessness.

She said huge cuts were coming that would create a housing crisis. A quarter hostels in London would have to cut hugely or close in coming years, and cuts legal aid had been proposed that meant tenants would only be able to get help when faced with imminent homelesness, not when problems first arose.

There was a huge problem in a change in approach. Housing was seen as one of pillars of welfare state, with the others being education and health. The last two were regarded still as essential public provisions, but people generally saw housing as an individual not a collective problem.

“We need to shift public perception. Everyone knows about university tuition feeds and the threats to the NHS, but I dont think people understand that massive changes are coming in housing, particularly for low-income households.”Questions and debate
Discussion revealed that funding for alternative housing projects had become much more difficult. There used to be temporary social housing grants, which allowed tenants to build “sweat equity”, doing repair work themselves far more cheaply than commercial rates, then winning rights to residency. There is a national empty homes fund of £100m. London Green Assembly members are working to try to make accessible. For e.g. the fund was demanding five years of audited accounts… something a new co-op was extremely unlikely to have.

We learned in the discussion that Barnet has reviewed policy priority for its housing to provide points for “positive community contributions”. But as Rachel from Shelter said, there were huge problems in allocating values: how should you compare a volunteer football coach with someone who was caring for their elderly mother. “Shelter think housing allocation should be on basis for need – this allows the most vulnerable people to rebuild lives in the most secure housing.”

I raised the issue of commercial provision of high-cost student housing, and learnt from Robert that residents of Nida properties only get a licence, not an assured shorthold tenancy, which residents do with Unite.